(News Bulletin 247) – The first week of September started on Wall Street (Monday was a holiday) on a slightly negative note: the Nasdaq Composite lost -0.08% to 14021, the S&P500 lost -0.42% to 4497, and the Dow Jones fell -0.56% to 34642.

But the Nasdaq-100 floated (+0.11% to 15,508) in the wake of Microsoft +1.5%, Netflix +2.2%, Tesla +4.7% and Airbnb +7.2%.

The S&P500 was weighed down by real estate developers and homebuilders: Lennar lost -4.8%, DR Horton -5%, Pulte Group -5.8%, Beazer Homes -6.4% and MDC -7, 2%.

The deterioration of the bond market clearly weighed on this sector which is highly exposed to interest rates, the tension in T-Bonds of +8 basis points towards 4.26% having been caused by the surge in oil on the ‘WTI’ ( which reached $87) while Saudi Arabia maintained its quota reduction (-1 million barrels/day) until the end of 2023, and Russia also reduced its exports.

The White House intended to rebuild strategic oil stocks in the United States around $70 a barrel this year (350 million barrels to be restocked), but the price was 24% beyond this target… and the Saudi Arabia appeared to be aiming to prevent any consolidation below $80.

The US bond markets deteriorated in the face of the underlying inflationary risk (a gallon of fuel went back over the $4 mark on average in 80% of the States of the Union), thus continuing the correction which had been perpetuated for six weeks. Significantly, all maturities over two years took eight basis points: the ‘5 years’ and ’30 years’ were on par, rising on Tuesday from 4.29% to 4.37%!

Nevertheless, this did not impress Goldman Sachs which reduced its estimate of the risk of recession at the end of 2023 to only 15%, against 20% previously.

Copyright (c) 2023 News Bulletin 247. All rights reserved.